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This Boggles the MInd

Senate Votes to Raise Taxes on Small Businesses

Yesterday, the Senate narrowly voted (51-48) to raise taxes on 1.2 million small businesses, which will likely kill more than 700,000 jobs at a time when nearly 13 million Americans are out of work. Senators Joe Lieberman (I-CT) and Jim Webb (D-VA) joined all Republicans in bipartisan opposition to the tax hike.

This is President Obama's economic plan. This is what he asked Congress to do. And he recently told a fundraising crowd that his economic plan has been working.

But Obama's Treasury Secretary, Timothy Geithner, said yesterday that "the economy is not growing fast enough," acknowledging that "unemployment is very high." "The institutions with authority should be doing everything they can to try to make economic growth stronger," he said.

The President's plan, now endorsed by the Democratic majority in the Senate, has little chance of going anywhere in the House of Representatives. But it has put the 51 Senators who want to raise taxes on record.

Perhaps the biggest lie in the tax debate is that this vote affects only "the rich." That's simply not true. Many small businesses, known as flow-through businesses, pay their taxes through the individual income tax. Ernst and Young estimates that these types of businesses "employ 54% of the private sector work force." This tax hike squarely hits 1.2 million of these businesses that hire workers and have incomes above $200,000.

Rather than punishing just "the rich," as Heritage's Curtis Dubay notes, "By pinpointing his tax increase on incomes over $200,000, President Obama has maximized the detrimental impact that his tax increase would have on job creation."

The Ernst and Young study on the impact of this tax hike showed that it could kill more than 700,000 jobs. This isn't surprising, since the businesses it targets are some of the country's most robust job creators. But it is surprising that a majority of the Senate would go along with this plan when the country is suffering from 8.2 percent unemployment.

As if that weren't enough, the Senate's actions would also raise the death tax from 35 percent to 55 percent. This confiscatory rate would hit small businesses and family farms exceptionally hard. Dubay explains:

The death tax is often portrayed as a tax that only rich heirs pay. In reality, the death tax hits family-owned businesses hardest. These businesses are valuable on paper because they have many assets that they need to make and sell their products. But the businesses' book values are not representative of the families' liquid assets. When a family member passes on, these families often have to sell all or part of the business to raise the cash to pay the death tax. This slows the growth of these businesses and in some cases forces them to lay off existing workers.

The Senate's vote means we are no closer to preventing Taxmageddon, the nearly $500 billion tax increase scheduled to hit Americans on January 1. It is difficult to imagine the economy sustaining such a blow. Families will be hit with an average tax increase of more than $4,100 next year if Congress allows this to go forward. Instead of preventing this calamity, the Senate voted to raise taxes. It simply boggles the mind.

The logic escapes me.
As companies like GE pay little to nothing in taxes.

barter, trade, cash.......the future success of small business in america is likely to be taking legal activities into underground, undisclosed, covert and undocumented areas. the reason we will never win the war on drugs is that it is so profitable to run a business that is not encumbered by compliance with regulation and taxes.

i am a small business man. my life's work is nothing more than the administration of a social program. i administer, collect, remit taxes and handout checks to workers and other people's businesses constantly. often, when the work is all said and done there is nothing left for me. when the penalties for success become too high there are two options, cheat or stay home. i like staying home. i don't have the desire to cheat.

barter, trade, cash.......the future success of small business in america is likely to be taking legal activities into underground, undisclosed, covert and undocumented areas. the reason we will never win the war on drugs is that it is so profitable to run a business that is not encumbered by compliance with regulation and taxes.

i am a small business man. my life's work is nothing more than the administration of a social program. i administer, collect, remit taxes and handout checks to workers and other people's businesses constantly. often, when the work is all said and done there is nothing left for me. when the penalties for success become too high there are two options, cheat or stay home. i like staying home. i don't have the desire to cheat.

You have my sympathies, John. You are part of the group I consider being the "ATLAS" that Ayn Rand wrote about in her book "Atlas Shrugged". More and more small business men and women will be doing as you have done...close shop!

Should Obama get re-elected, and Obamacare become law, there will be the most incredible shut-down of small businesses that the unemployment numbers we have now will increase beyond belief. Obama will run roughshod over the Constitution, and illegal aliens will run roughshod over the land.

FWIW, it would almost be worth it to watch the left get what they deserve...and to watch the looks of utter disbelief in their faces as the nation crumbles. Saddly, I fear the country would be under anarchy in many large cities. The class envy Obama is constantly promoting will foment into riots everywhere. The SFN crowd won't be satisfied getting only welfare and food stamps...they will be coming for what Obama said we didn't earn ourselves.

Community Organizers have a way to cause have-nots to believe they are entitled to what you and I have. After being told by their messiah so many times that the folks that start businesses and employ others are the bad guys, and we don't pay enough taxes so the government has to run up the debt, what do you think that crowd will do?

And we wonder why good law-abiding citizens are buying guns, and stocking pantries and freezers.

UB

When the one you love becomes a memory, that memory becomes a treasure.